* Preliminary approval for state guarantee expected Wednesday

* Will allow banks to offer TIM up to 3 bln euros financing

* Treasury has no objections but approval needs in-depth analysis (Adds context)

ROME, May 10 (Reuters) - Telecom Italia is on track to secure state guarantees on a credit facility worth up to 3 billion euros ($3.2 billion) with a preliminary green light expected on Wednesday, three people close to the matter said.

The state-guaranteed loan would shore up TIM's finances as new CEO Pietro Labriola readies a new turnaround plan for the former phone monopoly, which posted a record 8.4 billion euro net loss last year.

A group of banks comprising Italy's UniCredit, France's BNP Paribas and Credit Agricole as well as Spain's Santander have pre-approved the financing for TIM subject to the Italian state providing guarantees, the sources said.

All interested parties declined to comment.

Under a temporary easing in European Union rules on state aid, Italy's credits export agency SACE is able to provide guarantees covering up to 80% of loans granted to large companies facing difficulties due to COVID-19.

The aid scheme runs until the end June and so far it has allowed SACE to provide guarantees on 34 billion euros in bank loans to large Italian companies.

The sources said SACE's board on Wednesday will give preliminary approval for granting the guarantees. SACE's green light is only the first step of a lengthy approval process which requires Italy's economy minister to sign off on a decree authorizing the commitment.

The economy ministry has no objections but approval can only follows an in-depth analysis of TIM's request, one of the sources said.

The SACE guarantees would allow the banks to offer TIM a credit line worth between 2 billion and 3 billion euros, a separate source said. TIM is also evaluating alternative options as it works to keep a lid on its debt costs, the source added.

TIM has been battling for years with declining revenue in its hyper-competitive domestic market.

Last week it reported a drop in core profit and revenue for the first quarter saying households' demand for connectivity had weakened after a pandemic-driven surge.

Burdened with more than 30 billion euros in gross debt, TIM has around 3 billion euro in bonds coming due this year.

TIM also faces a 1.7 billion euro payment by the end of September as part of the amount it put in the pot to secure frequencies in a fifth-generation mobile spectrum auction.

Hit by multiple debt rating downgrades, TIM is working to split its network assets from its services operations, and raise money from new investors in the businesses.

Car maker Stellantis in 2020 tapped the SACE guarantees for a 6.3 billion euro three-year loan which it repaid in January ahead of maturity.

($1 = 0.9480 euros) (Reporting by Giuseppe Fonte, Valentina Za and Elvira Pollina Editing by Keith Weir)